REFINERY NEWS ROUNDUP: Plants in Europe expect better Q2; demand remains below 2019

Italian refiner Saras said May 11 it expects the refining environment to improve in the second quarter of 2021, with gasoline crack spreads already rising sharply along with expectations of a stronger diesel market.

The Sarroch refinery posted only a 1% increase in crude runs at 23.2 million barrels (3.18 million mt) in the first quarter, compared with 22.9 million barrels (3.14 million mt) in the same period in 2020, it added.

"Gasoline has been extremely healthy in the quarter, with crack levels at some of the highest in five year range while diesel is still suffering from an overhang, with air transport still having to pick up and negatively affecting crack levels," Saras CEO Dario Scaffardi said during a conference call.

Saras said an improvement in diesel crack had begun to emerge in Q1, even as refining margins remained substantially below prepandemic levels, particularly for diesel and jet fuel.

"Global air travel is showing some signs of recovery from 2020 lows though there are big regional differences. For example, air travel is picking up internally in the US but a recovery in transatlantic air travel is not imminent in the near future," Scaffardi added.

Romania's Rompetrol said May 17 its Petromidia refinery processed 1.265 million mt of feedstock in Q1, up from 1.24 million mt in the year-ago quarter. Its utilization was 84%, "higher by more than 10% compared to the same period of 2020," the company said. The increase was due to "continuous operation" compared with last year, when it carried out a general maintenance. The company also attributed the higher throughput and utilization to improved refining margins and oil products demand. Its Vega refinery had a throughput of 69,000 mt in Q1, slightly down from 72,000 mt in Q1 2020.

Demand for oil products in April exceeded last year's levels but still lags behind 2019.

French road fuel deliveries totaled 3.493 billion liters in April, up from 1.574 billion liters in April 2020 but down from 4.32 billion liters in April 2019, according to industry group UFIP, citing data from the country's oil industry committee CPDP. Compared with April 2019, road fuel deliveries in April were down 18.9%, with a 19.3% slump in diesel consumption and a 17.5% fall in gasoline consumption. However, road fuel deliveries in April 2021 more than doubled year on year. While a third lockdown in a bid to reduce coronavirus infections was in place in France in April, it was much less strict that the first lockdown -- in place from March 17 until May 11, 2020. The government plans to remove all limits on customer numbers on June 30, if the vaccination program continues at its current pace.

Italy's demand for refined oil products in April rebounded 49% on year-ago levels, but remained 15% below April 2019 levels due to ongoing COVID-19 restrictions, industry group Unione Energie per la Mobilita, or Unem, said May 20. Total oil products demand rose to 4.1 million mt in April, up from the comparable month of 2020, which saw oil demand in Italy hit a 50-year low as a result of a national lockdown, Unem said. Italy's demand for refined oil products in the first four months of this year gained 2.1% year on year at 15.9 million mt compared with the same period in 2020.

Meanwhile, a number of refineries have decided upon or are considering full, partial or temporary plant and unit closures.

** ExxonMobil has decided to convert its Slagen refinery in Norway into a fuel import terminal. The decision was taken after a consultation process with employees and their representatives.

** Gunvor's Rotterdam refinery has shuttered its two crude processing units, one in 2019 and the other one in 2020, and is developing new processes around hydrogen and the coprocessing of vegetable oil. The refinery in Antwerp is being mothballed with terminal activities continuing at the site. Future development opportunities are being assessed.

** The strike at France's Grandpuits refinery was called off in mid-February, but only temporarily. In September 2020, Total said it would convert the refinery into a biofuel and plastics recycling complex, ending crude refining at the site in early 2021. The refinery has been fully offline since late January. Total halted the CDU at Grandpuits Nov. 16, 2020, but other units had remained in operation.

** Eni is evaluating the conversion of its Livorno refinery in northwest Italy into a biorefinery, as part of the Italian company's wider strategy to make its activities more environmentally sustainable, a company spokesperson said. Eni has already converted two of its Italian refineries and is looking to almost double its biorefining capacity to around 2 million mt/year by 2024, and expand this by at least five times by 2050, as part of a pledge to achieve complete carbon neutrality by 2050.

** Portugal's Galp said in April that the last units at its Porto refinery should be stopped at the end of the month and decommissioning will then start, to be followed by decontamination. In a regulatory filing Dec. 21, 2020, the company said it will discontinue refining operations at the Porto refinery from 2021 and concentrate its core refining activities and future developments at the larger Sines refinery. Galp said it will focus on enhancing the resilience and competitiveness of the Sines site, with a view to improve efficiency and to integrate the production of advanced biofuels and other cleaner as well as more valuable products. At present, the site of Porto will remain a logistics hub, but the company will assess other ways to use the facility. The company intends to shift its entire refining operations to the larger 220,000 b/d Sines refinery, where it has an FCC and a hydrocracker. The company said it expects the utilization rate at Sines to reach 90% in 2021.

** France's Donges refinery is expected to restart in June, most likely around mid-June, a source at the CGT union said April 12. Total said Nov. 24 that it was to halt operations at Donges from Nov. 30 for the coming months due to weak margins in the wake of the demand slump caused by the coronavirus pandemic. The refinery had been operating at a loss, it said.

** Petroineos said April 26 its plan to transition the configuration of its UK Grangemouth refinery will be phased in over time and will take place during 2021. In January, the company concluded consultations with employees regarding its proposal to reconfigure the Grangemouth refinery in Scotland "to meet current and future anticipated demand of our fuels products," a process that started in November 2020. The company has said previously that it proposes a smaller refining operation at Grangemouth and plans to mothball the CDU1 and the FCC, two units that "have been closed throughout the COVID pandemic due to significantly reduced local and international demand for fuels."

** Croatia's Rijeka refinery will optimize its operations from November "for a few months" and during that period will "perform regular technological activities at process units such as catalyst regeneration and preparation of these plants for the new processing cycle in 2021 through regular maintenance work."

** Finland's Neste said it had discontinued refining operations at its smaller Naantali refinery at the end of March. "Neste will continue port and distribution terminal operations in Naantali," it said April 14. The company had previously announced plans to close Naantali by the end of March and develop the Porvoo refinery "toward co-processing renewable and circular raw materials." As a result of the closure of Naantali, Neste's total refining capacity in Finland is now approximately 10.5 million mt/year (206,000 b/d). With Naantali shut down, the company will focus the site on terminal and harbor operations. Neste's total crude production in Q1 was 2.943 mt, down from 3.703 mt in Q1 2020.

** Spain's Bilbao had the smaller of its two CDUs offline since Nov. 20, 2020, and recently announced a temporary layoff of one-third of its staff.

** Repsol said April 8 it will lay off up to 60% of the workforce -- up to 618 workers -- at its Puertollano refinery complex for up to six months, citing weak demand. The company had already halted the refinery's CDU citing unfavorable market conditions on March 31. The lubricant and chemical units have remained operational, with the chemical units due to carry out a regular turnaround in May.

** At A Coruna refinery, Repsol intends to halt operations at the coker unit, with a capacity of 1.1 million mt/year, and vacuum unit 2, but keep other units in operation until a planned turnaround of the fuel units in May. The company is temporarily laying off 31% of its staff at the A Coruna refinery due to the unprecedented decline in oil demand, it said April 8. The 212 layoffs are expected to last for a maximum of six months, it said in a statement.

** Germany's Heide refinery will reduce its staff by 106 positions following "intensive and constructive negotiations" since the end of October 2020, the refinery said Jan. 28. It said, however, it will be "well-positioned for the future" with the agreed downsizing and "by changing its business model toward the future production of green hydrogen."

** Essar Oil UK, owner of Stanlow refinery in northwest England, said it had closed new financial arrangements of over $850 million, thus replacing its former credit facility. The funding has strengthened its financial position, the company said, adding that it can "continue to focus its energies on its transition to become a "Low Carbon Energy Provider" of the future."

Essar Oil is already working on developing two blue hydrogen production hubs at Stanlow, it said. It also "remains committed to delivering the necessary operational cost reductions at the refinery over the course of the coming year in order to help secure its long-term future and to ensure it remains competitive in its traditional refining business."

In April, Essar Oil UK said that a "short term financial disruption" has not had "a material impact on the company's operations or financial outlook" and also noted that it was benefiting from higher sales volumes and positive earning.

Separately, Greece's Motor Oil Hellas said May 19 that it had a minor incident at its Corinth refinery earlier in the day, but the situation is "fully under control."

New and ongoing maintenance:

Future maintenance:

Near-term maintenance

New and revised entries

** Spain's Petronor said May 20 it is restarting the platforming unit in plant 2 following maintenance that started May 14. The company said May 17 it was restarting the turbo expander energy recovery unit from the refinery's FCC unit. The unit was halted May 4. The refinery currently has been operating at 40% of capacity since the CDU in plant 2 of the refinery was halted Nov. 20, 2020, due to market conditions.

** Poland's second largest refiner Grupa Lotos said May 13 a partial maintenance shutdown at its Gdansk refinery has been completed. "All the work was done safely and on budget," Lotos said in a statement. The maintenance shutdown began on Feb. 26 with the shutdown of the delayed coker unit. In total, 16 units were shut, including the mild hydrocracking, CDU/VDU, heavy oil processing and hydrogen production plant, Lotos said. The installations resumed operations in early April. In the second stage of the maintenance, which began last month, three lubricating oil production units were closed. They came back online at the beginning of May, Lotos said. The company said the remaining units of the refinery would undergo maintenance in the spring of 2022. Last month, Lotos said the maintenance would cause an estimated 5% fall in throughput in 2021.

** The Scholven part of Germany's Gelsenkirchen refinery started major works from May 15, the company said May 11. Some units at the plant will be halted for about eight weeks. During the turnarounds, more than 50 columns, over 25 reactors and 12 furnaces will be checked, as well as heat exchangers, pipelines and valves. The refinery consists of the Horst and Scholven sites, with Horst representing around one-third of total capacity.

** The maintenance at ExxonMobil's Rotterdam refinery, which started in March, and was extended into April, has been completed, according to market sources.

** Spain's Castellon will carry out maintenance in May, an industry source said May 18. The company declined to comment May 19, citing company policy. The refinery pushed back two maintenance works from 2020, without confirming dates -- the first covers the two distillation units, the powerformer 1 and the HVN, and the second, due to last two to three weeks, concerns one conversion unit (treatment plant) and the 1.4 million mt/year coker. The source did not say which units would be undergoing maintenance.

Existing entries

** Tupras announced in its Q1 report its maintenance programme for 2021. The company confirmed that the maintenance work announced last year, which led to the shutdown of the Izmir refinery, was all completed during Q1 as was work on the desulfurization unit at the Izmit refinery, and work on the crude and vacuum unit of the Batman refinery, started last year and continued during Q1. The revamp of the FCC unit at Izmit that started in Q1 and is planned to take 30 weeks was reported as ongoing. Planned for Q4 this year is periodic maintenance on the vacuum unit and lubes unit at Izmir, both scheduled to take six weeks.

** MOL will continue with smaller shutdowns of various units at the Danube and Bratislava refineries throughout the second and third quarters of 2021, the company said in its Q1 earnings presentation on May 7. MOL said earlier it is planning a "more intense" maintenance schedule this year than in 2020, when such activities were kept to a minimum in an effort to control capital expenditures.

Hungary's MOL reported total throughput of 3.91 million mt in Q1, down 4.5% year on year and the lowest in at least a decade. Low fuel demand, caused by mobility restrictions amid the third wave of the pandemic across the CEE region, was the main reason behind the low throughput, in addition to maintenance works at the Rijeka refinery.

** The continuous catalytic reformer unit at Israel's Haifa refinery has been stopped following a breakdown, and the company is preparing to carry out repairs, the refinery said May 5. The repairs are expected to last several weeks. The Jerusalem Post reported that the CCR unit had been halted following a fire on May 1. The fire, which was contained by the refinery's emergency team, occurred after damage to one of the pipes in the CCR, the report said. The refinery also said it estimates a loss of $20 million-$30 million for the period in which the unit will be halted. Separately, an executive committee established by the government has recommended the cessation of refining and petrochemical activity in the Haifa Bay due to environmental pollution, according to media reports.

** Varo Energy's Cressier refinery in Switzerland has started works on May 10, due to last around seven weeks until the end of June, according to a local media report. The units are gradually being halted for the planned maintenance. Previously, market sources said the refinery was planning works in May.

** Finland's Porvoo refinery said April 29 that a major turnaround started in early April is scheduled to last for about 12 weeks. The company indicated that the turnaround had had an impact on sales. Announcing Q1 results, Neste said sales volumes were about 18% lower year on year, mainly due to lower demand, preparations for the major turnaround of the Porvoo refinery, and the closure of its smaller Naantali refinery at the end of March. A major turnaround at Porvoo is performed about every five years. The maintenance work was originally planned for last year but was deferred due to COVID-19, with only the "most critical works" completed in spring 2020.

** Germany's Leuna refinery has started its general maintenance, which will last around eight weeks, the company said May 6. The company previously said it would carry out works in May and June. The maintenance and an upgrade had been scheduled for last autumn but were postponed "due to the ongoing pandemic and the resulting restrictions on travel and transport of goods, as well as the impact on international supply chains," the company has said previously. Total is investing around Eur150 million ($166 million) in "safety and environmental standards for the next cycle period," the company said.

Planning for the general maintenance, the fourth in the refinery's history, has been underway since 2018.

Separately, another major investment entitled 'Leuna 2020+', which has been underway since before the shutdown, will be integrated during the shutdown, the company said, adding that it is investing a similar amount as the maintenance investment in modernizing and expanding the POX methanol plant and "another conversion plant" to adapt better to "the changing market situation." It has previously said it would reduce production of heavy products as demand decreases, and increase production of methanol -- a key feedstock for the chemical industry. The project will deepen the integration of refining and petrochemical operations and increase the competitiveness of the plant, Total said previously.

** The ISAB refinery in Sicily is carrying out maintenance on its CR40 Gofiner unit, which breaks up heavy hydrocarbon molecules into lighter fractions using heat and catalysts, as well as its PR1 cumene catalyst, according to sources close to the refinery. Both units are in the northern section of the refinery. The duration or start date of the works is unknown and the refinery is currently online, though it is unclear how the maintenance and upgrades are affecting output. ISAB had returned both its north and its south plants to full operations earlier this year following a wide scale maintenance cycle, which began in October and included upgrades to the refinery's IGCC Cogen unit. The IGCC unit is still offline and its restart date, which depends on market conditions, is currently unknown, sources close to the refinery said.

** The Milazzo refinery located on the southern Italian island of Sicily will by the end of May complete maintenance works on its LC Finer unit, which is offline, as well as on other units as part of wide-scale upgrade works at the plant, a source close to the refinery told S&P Global Platts. The maintenance and upgrade works started in the first quarter of 2021. No information was available on which units aside from the LC Finer are currently involved in the works, or if and how production output is affected. The maintenance, including works on the LC Finer unit, was originally scheduled for 2019 and postponed various times.

** France's Donges refinery is expected to restart in June, most likely around mid-June, a source at the CGT union said April 12. Total said Nov. 24 that it was to halt operations at Donges from Nov. 30 for the coming months due to weak margins, in the wake of the demand slump caused by the coronavirus pandemic. The refinery had been operating at a loss, it said.

** France's Gonfreville refinery will be halting its base oil production facility due to structurally low demand, the company said March 2021. The base oil unit has been shut since December 2019 following a fire at the crude unit, a CGT union source said. Its restart would have required a major overhaul. The crude distillation unit, which was damaged after the fire at the pump feeding crude oil, remains offline. It is due to restart in May, according to CGT union sources.

** Shell's Pernis refinery in the Netherlands said that works on one of its units will last until late May. The works on the unidentified unit started in late March. The refinery performed works on another unit in February and March.

** Italy's Sarroch refinery is undergoing partial works, according to market sources. The company declined to comment but in its latest financial report in November 2020 said that it would lower maintenance costs over the next two years as all but essential upgrades are delayed beyond 2022.

** All units at France's Grandpuits refinery are now fully offline as a result of a strike which has meanwhile been called off. Total halted the crude distillation unit at Grandpuits Nov. 16 but the other units at the refinery had remained in operation. All units are now halted and product deliveries have also stopped. Work to prepare the dismantling of the refinery has been halted.

** Eni's Sannazzaro de Burgondi refinery in northern Italy started another cycle of maintenance and upgrade works, even as a decision on when to reactivate its Eni slurry technology (EST) unit, which has been offline since a 2016 fire, is still outstanding. The works being carried out are not the series of works planned for the EST unit that had previously been suspended.

** The Canary Islands' only refinery on Tenerife will be permanently closed in the long term. There has been no production since 2014. Cepsa will install some logistics and storage facilities at the site, amid a wider regeneration project.

Future

Existing entries

** Gunvor Group said that its Ingolstadt refinery in Germany will undertake projects focused on heating systems and exchangers "to continue improving its energy efficiency and reduce its emissions." A planned turnaround in 2023 will allow additional reductions, by carrying out projects on the FCC.

** Poland's second largest refiner Grupa Lotos will carry the second part of the maintenance at its Gdansk refinery in the spring of 2022.

** Lukoil's Neftochim refinery in Burgas, Bulgaria, which had scheduled out major works for this year, has postponed them, according to sources close to the matter. The refinery typically carries out works in February and March but has deferred them to later in 2021, possibly during the second half of the year. The works are expected to include atmospheric vacuum unit 1, atmospheric vacuum unit 2, atmospheric vacuum distillation 2, FCC, hydrotreatment, hydrocracker, according to company tender documents.

** France's Lavera refinery is planning works at its FCC unit in September.

** Austria's OMV said it will expand and modernize the cracker units and petrochemical cold section at its Burghausen refinery in Germany with the upgraded units planned to go live in Q3 2022, following a planned turnaround of the refinery.

** Czech Unipetrol said that following the turnaround at its Litvinov plant in Q2'20 the refinery has prepared production for a new four-year cycle. Thus the next turnaround is due in 2024.

** With its 2020 maintenance, Romania's Petromidia and the petrochemical division "will align with the new operating strategy, with a general turnaround scheduled for 4 years and technological shutdowns scheduled for 2 years," the company said.

** Two months of maintenance at the Sarpom refinery in Trecate, Italy, originally scheduled for October 2019 have been pushed back to 2021. Details on which units at the refinery will be upgraded as part of the maintenance -- of the kind needed every 3-4 years -- had yet to emerge.

** The Holborn refinery near Hamburg, northern Germany, plans its next turnaround in 2023. Its previous maintenance was in the autumn of 2018. The refinery carries out major works every five years.

** The next major turnaround at Preem's Gothenburg refinery in Sweden will be in 2021.

** Romania's Petrobrazi will undergo its next big turnaround in 2022.

** Total's Feyzin is considering mothballing a visbreaker unit around 2021 as demand for heavy fuel is gradually declining and the unit works on average no more than three days a month. As a result of the mothballing seven people would lose their jobs, but would be offered other jobs within the organization, the company said.